Asian markets rally as China vows to 'fight to the end' over Trump's new tariff threat

China has threatened to "resolutely take countermeasures" in response to Donald Trump's threat of an additional 50% tariff on Chinese imports.

In a statement the Commerce Ministry said the US's imposition of "so-called 'reciprocal tariffs'" on China is "completely groundless and is a typical unilateral bullying practice".

It hinted more retaliatory tariffs may come in the future.

"The countermeasures China has taken are aimed at safeguarding its sovereignty, security and development interests, and maintaining the normal international trade order. They are completely legitimate," the ministry said.

"The US threat to escalate tariffs on China is a mistake on top of a mistake and once again exposes the blackmailing nature of the US. China will never accept this. If the US insists on its own way, China will fight to the end."

Trump tariffs: Follow latest updates

Mr Trump's threat, delivered on social media, came after China said it would retaliate against US tariffs announced last week.

"If China does not withdraw its 34% increase above their already long term trading abuses by tomorrow, April 8th, 2025, the United States will impose ADDITIONAL Tariffs on China of 50%, effective April 9th," he wrote on Truth Social.

"Additionally, all talks with China concerning their requested meetings with us will be terminated!"

If Mr Trump implements his plans, it would mean US tariffs on imports from China would reach a combined 104%.

The new taxes would be piled on top of the 20% tariffs announced as punishment for what the president regards as China's role in the US fentanyl crisis and his separate 34% tariffs announced last week.

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Asian markets rally

It comes as Asian markets opened higher on Tuesday.

Japan's Nikkei 225 share benchmark was up 6% after falling nearly 8% a day earlier and the broader Topix traded 6.8% higher.

The US semiconductor index climbed 2.7% overnight, while the S&P and Nasdaq futures each rose more than 1% in Asia trade. South Korea's Kospi gained 2% and markets in Australia and New Zealand were also higher.

Analysis: Tariffs could herald one of the most painful episodes in modern times

Most US markets down

Asian markets had plunged on Monday, with stocks in Hong Kong falling 13.2% in their worst day since 1997, during the Asian financial crisis.

Most US markets were down on Monday, with the S&P 500 closing the day 0.23% lower, while the Dow Jones Industrial Average finished 0.91% down - though the Nasdaq ended in positive territory, up 0.10%.

The UK's benchmark stock index, the FTSE 100, closed 4.38% down - one of the biggest drops in years, in line with the falls seen in the early days of COVID-19 lockdowns, but less steep than the 4.95% loss seen on Friday.

'We can't be the stupid people anymore'

Mr Trump ruled out pausing his sweeping tariffs on Monday evening, saying: "We're not looking at that."

He said affected countries have been negotiating with his administration, which he said will try and make "fair deals" with each of them.

"We're going to get fair deals with every country and if we don't they are not going to be able to participate with the US," he added.

Mr Trump also claimed the US "has been ripped off by many countries over the years", adding: "We can't do it anymore. We can't be the stupid people anymore."